ETF/No Load Fund Tracker Newsletter For Friday, August 10, 2012

Ulli ETF Tracker 2 Comments

ETF/No Load Fund Tracker StatSheet




Market Commentary

Friday, August 10, 2012


US stocks managed to cling to gains Friday finishing the week higher despite disappointing economic data from China that stoked fears of a global slowdown.

The USD declined against most of its global peers as weak Chinese data rekindled ideas of coordinated stimulus measures by global central banks. The dollar index, a gauge of the USD against a basket of six global currencies, fell to 82.541 on Friday from 82.646 a day earlier.

Chinese data triggered a selloff in Europe with the main benchmark declining after a five day winning streak, led by food, oil and drug stocks. The benchmark however, closed up 1.6 percent for the week.

Economists have started to wonder about the potential effect of alleged monetary stimulus by central banks that markets are widely anticipating in September. With most of Europe away on vacation, doubt is being expressed in regards to the urgency of the European Central Bank’s intervention plan.

Spanish stocks retreated with the IBEX 35 falling 0.75 percent. Following International Energy Agency’s warning of weak global demand, Europe’s energy-related stocks declined the most. French CAC 40 lost 0.3 percent while Germany’s DAX fell 0.6 percent.  The FTSE 100 slipped 0.1 percent in London.

US Treasury yields sank in today’s session for the first time in six as Chinese exports climbed just one percent from a year earlier in July pushing investors to safe havens. Imports also grew slower-than-forecast at 4.7 percent with trade surplus shrinking unexpectedly in July. A report from the Bureau of Labor statistics showed export prices declined 0.3 percent while import priced fell 0.6 percent.

As equities drifted aimlessly over weak Chinese economic news throughout the day before securing a slim margin in the US on absolutely no volume, investors became worried on growth prospects across the world.

However, Turkish equities outperformed other markets today with the iShares MSCI Turkey Investable Market Index Fund (TUR) rising 1.44 percent on the day. TUR features among the best performing emerging market funds returning an eye-popping 36 percent year-to-date. The International Monetary Fund expects the country’s GDP to grow 2.3 percent in 2012 and 3.2 percent in 2013.

On the back of strong risk appetite, the fear-tracking volatility index has taken a beating. As the CBOE Volatility Index dropped below 15 today, the ProShares VIX Short-Term Futures ETF tumbled, losing 1.90 percent on the day. This ETF may break out sharply if markets experience a pull back next week.

Our Trend Tracking Indexes (TTIs) leaked higher following the S&P 500, and the International TTI crossed above its respective trend line.  As I pointed out in yesterday’s StatSheet, I want to see more staying power before issuing a ‘Buy’ signal for that arena.

Again, the churning to the upside this past week has been on downright atrocious volume, and I would not read too much into this until all Wall Street players, along with their European cousins, have returned from vacation.

Here’s how we ended the week:

Domestic TTI: +3.10% (last week +2.72%)

International TTI: +1.56% (last week -0.03%)

Have a great week.


Disclosure: No holdings



All Reader Q & A’s are listed at our web site!
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A note from reader Larry:

Q: Ulli: how do I cut through all the words about what happened in the past and find out what specific ETF’s to buy or sell right now?  Where are the specific buy/sell recommendations made, since I have minimal time to read so many words that don’t tell readers what investment decisions to make every day?

A: Larry: That’s one of the reasons why I set up the ETF model portfolios, which are updated every Wednesday. Here’s the latest link:

You simply pick the one that meets your risk profile and set up your trailing sell stops, which will take you a couple of minutes to monitor on a daily basis. That way, you don’t have to go through the StatSheet and Cutline tables.

Hope that helps.



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Comments 2

  1. When will you reinvest the money you got when you made the sales in the model portfolios ?

  2. Peter,

    I just answered that question when you asked it before. Here’s what I posted:

    There are several ways. You could pick a different ETF that is showing upward momentum and use that to fill the empty space. Or, if you like to stay with the model portfolio concept, you could substitute, say VTI in Model #2, with a less volatile fund. I have done that in my advisor practice by predominately using DVY all year instead of VTI with the result that we still own it, as its sell stop never got triggered during the pullback periods. Or, if you like to stick with VTI, re-enter once the old high, from which the 7% sell stop was calculated, has been taken out.

    Alternatively, there is nothing wrong with staying on the sidelines as some sort of pullback lies ahead with markets having gotten ahead of themselves; in my opinion.


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